China rejections of U.S. corn top 1 million tons

China canceled purchases of 221,400 tonnes of U.S. corn last week, the U.S. Agriculture Department said on Thursday, bringing the total to more than 1 million tons of corn rejected since November in a dispute involving a biotech variety not approved by the No. 3 buyer of U.S. grain.

The corn cancellations come amid trade reports that China also was suspending approval of shipments of dried distiller's grains, or DDGs, a corn-based ethanol byproduct used as animal feed.

China has rejected cargoes of corn and DDGs that contained Syngenta AG's MIR 162 variety, a genetically modified seed designed to protect plants from crop-damaging insects. The variety is approved by all other major corn importers but not China, where Syngenta applied for approval four years ago.

Ample corn stocks, high grain prices and reduced demand tied to bird flu and a slowing economy in China are other reasons that the country decided to cancel the purchases, analysts and traders said.

"This will again mean that large volumes of U.S. corn are likely to have to find new buyers in Asia and elsewhere," a German grain trader said. "This will be good news for the big South Korean and Taiwanese feed corn importers. DDGs importers like Israel are also likely to have some bargain offers put their ways."

Export sales of corn by the United States remained robust last week despite the cancellations and a run-up in Chicago Board of Trade corn futures that made U.S. supplies less competitive in global markets.

Corn sales for the week ended March 27 totaled 960,600 tonnes, within the range of analysts' expectations of 850,000 to 1.15 million tons. Top importer Japan bought 236,500 tons, while Egypt and Saudi Arabia each bought a cargo that was "switched" from China, USDA data showed.